American Recovery and Reinvestment Act of 2009 A Guide to

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					American Recovery and Reinvestment Act of 2009:
A Guide to Renewable Energy and Energy Efficiency
 Opportunities for Local and Tribal Governments




                     Prepared by:
                   ICF International
             1725 Eye St., NW, Suite 1000
                Washington, DC 20006

                   Prepared for:
                   Andrea Denny
             EPA State and Local Branch




                   February 27, 2009
                                                        TABLE OF CONTENTS
1   Introduction........................................................................................................................................ 1
    1.1      Overview of American Recovery and Reinvestment Act........................................................... 1
    1.2      EPA Resources ......................................................................................................................... 1
    1.3      Federal Agency Recovery Websites ......................................................................................... 2
    1.4      Additional Resources................................................................................................................. 2
2   Funding Opportunities...................................................................................................................... 2
    2.1      Energy in Local Government Operations .................................................................................. 3
    2.2      Affordable Housing .................................................................................................................... 6
    2.3      Green Schools ........................................................................................................................... 9
    2.4      Transportation and Alternative Fuels ...................................................................................... 10
    2.5      Green Job Training.................................................................................................................. 12
3   Tax Incentives and Bond Programs .............................................................................................. 13
    3.1      Existing Homes Tax Credit ...................................................................................................... 13
    3.2      New Homes Tax Credit ........................................................................................................... 13
    3.3      Investment Tax Credit for Installation of Solar, Geothermal, and Wind Power....................... 14
    3.4      Advanced Energy Investment Credit (AEIC) ........................................................................... 14
    3.5      Renewable Energy Production Tax Credit Extension ............................................................. 14
    3.6      Election of Renewable Energy Investment Credit in Lieu of Production Credit ...................... 14
    3.7      Coordination with Renewable Energy Grants ......................................................................... 14
    3.8      Repeal of Subsidized Energy Financing Limitation on Investment Tax Credit ....................... 15
    3.9      Installment of Alternative Fuel Pump Credit ............................................................................ 15
    3.10 Plug-in Electric Drive Vehicle Credit........................................................................................ 15
    3.11 Clean Renewable Energy Bonds ............................................................................................ 15
    3.12 Energy Conservation Bonds.................................................................................................... 15
    3.13 Qualified School Construction Bonds...................................................................................... 15
    3.14 Qualified Zone Academy Bonds .............................................................................................. 16
    3.15 EPA and Other Federal Resources......................................................................................... 16
1    INTRODUCTION
     This section provides information on the American Recovery and Reinvestment Act of 2009 (ARRA),
as well as links to EPA resources and other organizations. The following section focuses on key funding
opportunities for local and tribal government efforts in clean energy. The final section of this paper
describes tax incentives and bond programs relevant to clean energy efforts. The paper highlights
potential opportunities to maximize clean energy investments; but local and tribal governments should
refer to guidelines published by the federal agency administering each funding stream for more detail
about allowable activities.

     1.1 Overview of American Recovery and Reinvestment Act

     The ARRA was signed into law by President Barack Obama on February 17, 2009. The ARRA is a
wide-ranging effort to jumpstart the weakened economy and to lay the groundwork for developing an
economy that will be able to meet the challenges of the 21st century through investment in infrastructure,
energy, education, and tax cuts. If successful, ARRA could create up to 3.5 million jobs by the end of
2010. The ARRA includes a large number of funding opportunities and tax incentives to support
investment in clean energy at the local level. These incentives are designed to strengthen the economy
and to promote clean and renewable energy.
       ARRA will directly foster improved energy efficiency and increased production and use of renewable
energy sources through grants and loans for specific projects and indirectly through tax incentives. Direct
funding opportunities include grants for weatherization and energy improvements for affordable housing
projects; schools; local government operations; water quality protection programs; and research and job
training to prepare workers for careers in renewable energy and energy efficiency industries. Tax
incentives in ARRA that are relevant to state and local governments include expansions of pre-existing
tax credits for installation of renewable energy generation and related utility installation; an entirely new
tax credit for facilities that invest in, rather than produce, renewable energy sources; and expansion of a
credit for installing alternative fuel pumps. These and other programs are detailed below. For more
information on ARRA’s purpose, funding details, and the cost to taxpayers, visit www.recovery.gov. The
bill, in its entirety, is available at http://frwebgate.access.gpo.gov/cgi-
bin/getdoc.cgi?dbname=111_cong_bills&docid=f:h1enr.pdf.

     1.2 EPA Resources

    The EPA provides a broad array of web resources to help the public take advantage of the funding
opportunities and tax credits discussed in this paper. Following the program descriptions below are
several EPA resources specific to individual program area. In addition to those are the following general
EPA resources available to the public:
         •   The EPA Recovery Website. General information about the ARRA and EPA-specific
             activities under the bill are available at http://www.epa.gov/recovery/.
         •   The Local Clean Energy Webcast Series. This series of EPA webcasts provides useful
             information on a variety of EPA programs designed for local governments. In addition to
             trainings on specific clean energy topics, a webcast titled “Navigating the Grant Process for
             Local Governments,” provides a useful guide on applying for federal grants. Retrieve this
             and other webcasts at http://epa.gov/cleanenergy/energy-programs/state-and-
             local/webcast.html.




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    1.3 Federal Agency Recovery Websites

   Each Federal Agency has established a website to provide information about their implementation of
ARRA. Websites for agencies included in this paper are:
    • US Department of Education http://www.ed.gov/recovery/
    • US Department of Energy            http://www.energy.gov/recovery
    • US Department of Housing and Urban Development              http://www.hud.gov/recovery/
    • US Department of Labor             http://www.dol.gov/recovery/
    • US Department of Transportation http://www.dot.gov/recovery/
    • US Environmental Protection Agency         http://www.epa.gov/recovery/



    1.4 Additional Resources

      The following websites and online documents contain more detail about the ARRA, including many
of the programs discussed here, as well as other programs funded under the ARRA that are not included
in this paper. While this paper focuses on opportunities for local governments, in some cases details have
not yet been released regarding new and increased funding for federal agencies. It is likely that as money
from the ARRA is disbursed by federal agencies, additional funding opportunities for local or tribal
governments may become available. The following resources will likely provide useful information about
developments in funding opportunities.
    •   ICLEI. February 2009. “Stimulus Funding Updates.” http://www.icleiusa.org/action-
        center/financing-staffing/stimulus-funding-updates
    •   National Association of Regional Councils (NARC). February 17th, 2009. HR1 Economic
        Recovery Conference Report.
        http://narc.org/uploads/HR%201%20Conference%20Report%20Summary%20-
        %20Prepared%20by%20NARC%20021709(2).pdf
    •   U.S. Conference of Mayors Recovery Tracking and Implementation Website.
        http://www.usmayors.org/recovery/.
    •   Climate Communities. http://climatecommunities.us/.
    •   American Council for an Energy Efficient Economy. http://www.aceee.org/.
    •   National Governors Association. http://www.nga.org/.
    •   National Association of Clean Air Agencies. http://www.4cleanair.org/.


2   FUNDING OPPORTUNITIES
    This section highlights major funding opportunities for local and tribal governments related to clean
energy in the following program areas:
         •   energy,
         •   affordable housing,
         •   green schools,



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         •   transportation and alternative fuels, and
         •   green job training.
Under each area, one or more funding opportunities are described, along with eligibility requirements,
program funding levels, and links to agencies responsible for program administration. Finally, a list of
EPA resources is provided for each program area.
    Some of the programs are new; others are existing programs receiving increased funding under
ARRA. In general, the funds allocated under ARRA are designated as “emergency funds” designed to be
spent as soon as feasible. All funds under ARRA are made available for obligation until September 30,
2010, unless otherwise stated. Any additional guidelines for funding allocation timelines are provided
below.

     2.1 Energy in Local Government Operations

        2.1.1   Energy Efficiency and Conservation Block Grants

                a. Description: The Energy and Environmental Block Grant program assists local, state
                   and tribal governments in developing and implementing strategies to help the nation
                   meet its energy and climate goals. The purpose of the program is to help eligible
                   entities reduce fossil fuel emissions, reduce the total energy use of eligible entities
                   and improve energy efficiency in the transportation, building, and other sectors. Of
                   the $3.2 billion in total program funds, $2.8 billion will be allocated as authorized in
                   Title V, Subtitle E of the Energy Independence and Security Act of 2007. An
                   additional $400 million will be available in competitive grants.
                b. Eligibility: States, Indian tribes, and specified units of local government (cities and
                   counties). Entities eligible for direct formula grants from DOE are 1) cities with a
                   population of at least 35,000 people or that are one of the top ten most populous
                   cities in the state; 2) counties with populations of at least 200,000 or that are one of
                   the top ten most populous counties in the state; 3) Federally-recognized Indian tribes;
                   and 5) states including the District of Columbia and U.S. Territories. Entities eligible
                   for sub grants from states are cities, counties, and Indian tribes ineligible for formula
                   grants from DOE. All entities are eligible for competitive funds.
                c. Funding Allocation: $3.2 Billion
                d. Program Administration: The Office of Weatherization and Intergovernmental
                   Programs of the Office of Energy Efficiency and Renewable Energy (EERE) of the
                   US Department of Energy (DOE) http://apps1.eere.energy.gov/wip/block_grants.cfm

        2.1.2   State Energy Program

                a. Description: Under the terms of the ARRA, the DOE Secretary provides grants to
                   the State and Territory governors. The funds, distributed to the states by formula
                   allocation, will be used for state-wide energy programs such as building retrofits,
                   programs that incent efficiency for utilities, adoption and enforcement of energy
                   efficient building codes, and transportation measures. The states will prioritize the
                   programs carried out with these funds toward increased energy efficiency and
                   renewable energy applications.
                b. Eligibility: The 56 governors of the States, Territories and the Mayor of the District
                   of Columbia are eligible to receive ARRA funds as long as the governor notifies the
                   DOE Secretary in writing that he has received assurances that (1) the PUC will
                   institute a policy to incent efficiency for utilities, (2) energy efficient residential and
                   commercial building codes will be adopted and a plan developed to achieve
                   complance, and (3) prioritize grants toward funding energy efficiency and renewable
                   energy programs.
                c. Funding Allocation: $3.1 billion


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        d. Program Administration: The Office of Weatherization and Intergovernmental
           Programs of the Office of Energy Efficiency and Renewable Energy (EERE) of the
           US Department of Energy (DOE)
           http://apps1.eere.energy.gov/state_energy_program/

2.1.3   Clean Water State Revolving Funds and Drinking Water State Revolving Fund
        Capitalization Grants

        a. Description: Clean Water State Revolving Fund programs provide monies to fund
           water quality protection programs for wastewater treatment, nonpoint source pollution
           control, and watershed and estuary management. The programs provide low-interest
           loans with flexible terms. The Drinking Water State Revolving Fund operates in a
           similar manner by providing financial incentive for public and private water systems to
           finance drinking water infrastructure improvements. The ARRA allocated money to
           both of these programs, which the specification that not less than 20% of each
           Revolving Fund be available for projects to address green infrastructure, water and/or
           energy efficiency, innovative water quality improvements, decentralized wastewater
           treatment, stormwater runoff mitigation, and water conservation.
        b. Eligibility: Applicants must be states or Puerto Rico in order to receive capitalization
           grants. States use funds awarded to them to provide loans and other types of
           financial assistance to eligible public water systems, local communities, interstate
           agencies, and Indian tribes. Strong preference is given to projects that are ready to
           begin construction within 12 months of the enactment of the ARRA.
        c. Funding Allocation: $6 billion total, $4 billion for the Clean Water State Revolving
           Funds, $2 billion for Drinking Water State Revolving Fund.
        d. Program Administration: Office of Water, Environmental Protection Agency (EPA)
           http://www.epa.gov/owm/cwfinance/cwsrf/
           http://www.epa.gov/safewater/dwsrf/index.html

2.1.4   Rural Community Facilities Program Account and the Rural Water and Waste
        Disposal Program Account

        a. Description: The purpose of these two accounts is to provide capital for rural
           programs to improve the quality of the community. These accounts directly fund
           loans and grants for rural community facilities programs and for waste and water
           programs as described in the Consolidated Farm and Rural Development Act. The
           Rural Community Facilities Program Account provides capital for projects that
           support overall community development, such as child care facilities, food recovery
           and distribution centers. The Rural Water and Waste Disposal Program Account
           funds may be used for the construction or renovation of rural water facilities or rural
           waste disposal facilities.
        b. Eligibility: Municipalities, counties, and other local governments, associations,
           NGOs, Indian tribes located in exclusively rural areas can apply. Eligible
           beneficiaries for the funds for the Rural Community Facilities Program Account can
           include farmers, ranchers, rural residents, rural business and other users of public
           facilities.
        c. Funding Allocation: $130 million for the Rural Community Facilities Program
           Account, $1.38 billion for the Rural Water and Waste Disposal Program Account.
        d. Program Administration: Rural Housing Service, Department of Agriculture
           (USDA)
            http://www.rurdev.usda.gov/

2.1.5   EPA Resources for Energy

        a. ENERGY STAR




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      i.    ENERGY STAR for local governments
            http://www.energystar.gov/index.cfm?c=government.bus_government_local
       ii.  ENERGY STAR for Water and Wastewater Utilities
            http://www.energystar.gov/index.cfm?c=water.wastewater_drinking_water
      iii.  ENERGY STAR for K-12 Schools
            http://www.energystar.gov/index.cfm?c=k12_schools.bus_schoolsk12
     iv.    Portfolio Manager
            Portfolio Manger helps you maximize your stimulus spending in three easy
            steps: 1) prioritize projects, 2) track progress, and 3) verify results. The tool lets
            you track and assess energy and water consumption within individual buildings
            as well as across an entire building portfolio. Managers of drinking water
            systems and wastewater treatment plants can now track energy use, energy
            costs, and associated carbon emissions by using Portfolio Manager, EPA's
            online benchmarking tool. Portfolio Manager also offers wastewater treatment
            plant managers the ability to compare the energy use of their plants with other
            peer plants using the EPA energy performance rating system.
            http://www.energystar.gov/benchmark
       v.   ENERGY STAR Challenge Toolkit contains materials to help local
            governments communicate commitment to energy efficiency and promote
            learning in the community.
            http://www.energystar.gov/index.cfm?c=challenge.challenge_toolkit
     vi.    Quick List of ENERGY STAR resources for buildings.
            http://www.energystar.gov/ia/business/challenge/get_started/QuickListBusines
            s.pdf
     vii.   Menu of ENERGY STAR options for higher education.
            http://www.energystar.gov/ia/business/higher_ed/menu_of_offerings_higher_e
            d.pdf
b.    Local Climate and Energy Program
        i.  This page contains links to best practices and training to help local
            governments implement cost effective energy efficiency and renewable energy
            in their communities.
            http://epa.gov/cleanenergy/energy-programs/state-and-local/local.html
c.    Lead by Example Guidebook—Coming Soon
      i.    This guide for state and local officials details how to “lead by example” by
            establishing programs that achieve substantial energy cost savings within their
            own operations, buildings, and fleets and demonstrate the feasibility and
            benefits of clean energy to the larger market. The guide will be available online
            at: http://epa.gov/cleanenergy/energy-programs/state-and-local
d.    National Action Plan for Energy Efficiency (Action Plan)
        i.  The Action Plan is a private-public initiative to create sustainable, aggressive
            national commitment to energy efficiency through collaborative efforts of gas
            and electric utilities, utility regulators, and other partner organizations.
            http://www.epa.gov/cleanenergy/energy-programs/napee/index.html
e.    Heat Island Resources
        i.  EPA’s Heat Island Effect website contains resources on what heat islands are
            and how communities can combat their negative effects.
            http://www.epa.gov/heatisland/index.htm
f.    Combined Heat and Power Partnership
        i.  Combined heat and power (CHP), also known as cogeneration, is an efficient,
            clean, and reliable approach to generating power and thermal energy from a
            single fuel source.
            http://www.epa.gov/chp/
g.    Landfill Methane Outreach Program
        i.  The U.S. EPA's Landfill Methane Outreach Program (LMOP) is a voluntary
            assistance and partnership program that promotes the use of landfill gas as a
            renewable, green energy source.


                                       Page 5
                    http://www.epa.gov/lmop/
          h. Green Power Partnership
               i.   The Green Power Partnership is a voluntary program that supports the
                    organizational procurement of green power and installation of on-site
                    renewables.
                    http://www.epa.gov/greenpower/pubs/onsite.htm
          h. EPA Smartgrowth Program
             i.     "Smart growth" covers a range of development and conservation strategies
                    that help protect our natural environment and make our communities more
                    attractive, economically stronger, and more socially diverse.
                    http://epa.gov/smartgrowth
          i.  Office of Waste Water Management
               i.   The Office of Wastewater Management oversees a range of programs
                    contributing to the well-being of the nation’s waters and watersheds.
                    http://www.epa.gov/owm/
              ii.   Ensuring a Sustainable Future: An Energy Management Guidebook for
                    Wastewater and Water Utilities. This guidebook provides utility managers with
                    a step-by-step method, based on a Plan-Do-Check-Act management system
                    approach, to identify, implement, measure, and improve energy efficiency and
                    renewable opportunities at their utilities.
                    http://www.epa.gov/waterinfrastructure/pdfs/guidebook_si_energymanagement
                    .pdf
          j. StateTechnical Forum, Clean Energy Programs
               i.   EPA launched the State Clean Energy-Environment Technical Forum to
                    explore analytical questions and resolve key issues surrounding state clean
                    energy efforts. Many of the topics covered are also relevant to local
                    governments including clean distributed generation, clean energy in water and
                    wastewater treatment facilities, clean energy tax incentives and many others.
                    http://www.epa.gov/solar/energy-programs/state-and-local/state-
                    forum.html

2.2 Affordable Housing

  2.2.1   Weatherization Assistance Program

          a. Description: The Weatherization Assistance Program enables low-income families
             to permanently reduce their energy bills by making their homes more energy efficient.
             DOE provides funding and technical guidance to the States, who run their own
             programs, set rules for eligibility, select service providers, and review their
             performance for quality. Weatherization services have also been shown to reduce
             water consumption, increase property values, and create jobs. Local governments
             can publicize these services to their citizens, encourage them to apply, and provide
             other services to facilitate the application process.
          b. Eligibility: People automatically eligible for funding include those receiving
             Supplemental Security Income or Aid to Families with Dependent Children. Usually
             those over 60 years of age, families with one or more members with a disability, and
             families with children also receive preference.
          c. Funding Allocation: $5 billion
          d. Program Administration: The Office of Weatherization and Intergovernmental
             Programs of the Office of Energy Efficiency and Renewable Energy (EERE) of the
             US Department of Energy (DOE)
                   i. Weatherization Assistance Program:
                      http://apps1.eere.energy.gov/weatherization/
                  ii. State Weatherization Contacts:
                      http://apps1.eere.energy.gov/weatherization/State_contacts.cfm



                                            Page 6
               iii. Weatherization Assistance Program Technical Assistance Center:
                    http://www.waptac.org/
               iv. State by State Breakdown of Weatherization Funding (p4):
                    http://usmayors.org/mser/documents/arra-report-Stateprog.pdf

2.2.2   Public Housing Capital Fund

        a. Description: The Public Housing Capital Fund provides formula grants to Public
           Housing Agencies (PHAs) for capital and management activities, including
           modernization and development of public housing. These grants benefit the
           residents of low-income public housing. The stimulus funds specified in the ARRA
           are allocated for the energy efficient modernization and renovation of the public
           house inventory.
        b. Eligibility: The applicant must be a PHA that has demonstrated its legal authority to
           develop, own, modernize, and operate a public housing development in accordance
           with the 1937 Act. The beneficiaries of the application must be low-income public
           housing residents.
        c. Funding Allocation: $4 billion
                 i. $1 billion from the Public Housing Capitol Fund funding to fund
                    improvements in energy efficiency, including investments that leverage
                    private sector funding or financing for renovations and energy conservation
                    retrofit investments.
                ii. Funds shall be obligated to public housing agencies within 30 days of
                    enactment of the ARRA, which was signed February 17, 2009. Each public
                    housing authority will execute a Capital Fund Program Amendment to the
                    Annual Contributions Contract which must be signed by the local HUD field
                    Office.
        d. Program Administration: Public and Indian Housing, Department of Housing and
           Urban Development (HUD)
            http://www.hud.gov/offices/pih/programs/ph/capfund/index.cfm

2.2.3   Native American Housing Block Grants

        a. Description: This program provides the means for tribal governing bodies to name a
           tribally designated housing entity to prepare an Indian Housing Plan. The block grant
           serves the housing needs of low-income American Indians and Alaska Natives.
           Eligible activities include modernization, construction, rehabilitation of homes, and
           housing related services. The funds provided by the ARRA require energy efficient
           modernization and renovation of housing maintained by these Native American
           housing programs and the development of sustainable communities.
        b. Eligibility: The block grant is made available annually using an allocation formula
           for Indian tribes with approved Indian Housing Plans.
        c. Funding Allocation: $510 million
                  i. $255 million of these funds will be distributed according to the same funding
                     formula that was used to allocate Indian Housing Block Grants in fiscal year
                     2008.
                 ii. The Secretary of HUD may obligate $255 million of the amount provided
                     under this heading for competitive grants to eligible entities that apply for
                     funds authorized under NAHASDA. The Secretary must obligate these funds
                     by September 2009.
                iii. Funding is available until September 30,2011, however extensive legislation
                     designates what percentage of total funding must be obligated within 1 years,
                     2 years and 3 years time.
        d. Program Administration: Indian Housing Block Grants, Department of Housing and
           Urban Development (HUD)
           http://www.hud.gov/progdesc/ihbg1208.cfm



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2.2.4   Assisted Housing Stability and Energy and Green Retrofit Investments

        a. Description: The Section 8 Program was developed by HUD to provide rental
           subsidies for eligible tenant families (including single persons) residing in newly
           constructed, rehabilitated, and existing rental and cooperative apartment projects.
           The ARRA sets aside $2.25 billion for assistance to owners of properties receiving
           project-based assistance. $2 billion of these funds are for project-based rental
           assistance for payments to owners for 12-month periods. HUD will use the $2.0
           billion to fund contract renewals under the Section 8 program. However, $250 million
           are specifically set aside for energy efficient modernization and renovation of housing
           of HUD-sponsored housing for low income, elderly, and disabled persons.
        b. Eligibility: Beneficiaries must be residents of HUD-sponsored housing for low-
           income, elderly, and disabled persons. Owners must have at least a satisfactory
           management review rating, be in substantial compliance with applicable performance
           standards and legal requirements, and commit to an additional period of affordability
           in order to apply.
        c. Funding Allocation: $250 million
                   i. Projects funded with grants or loans under this heading shall be provided
                      through authorized programs administered by the Office of Affordable
                      Housing Preservation of the HUD.
                  ii. Funds available until September 30, 2012.
        d. Program Administration: Office of Affordable Housing Preservation, Department of
           Housing and Urban Development (HUD)
                   i. http://www.hud.gov/offices/hsg/omhar/index.cfm
                  ii. http://www.hud.gov/recovery/pbrassistance.cfm
                 iii. http://www.hud.gov/recovery/recoveryact.cfm

2.2.5   HOME Investment Partnerships Program

        a. Description: HOME is the largest Federal block grant to state and local governments
           designed exclusively to create affordable housing for low-income households.
           HOME provides formula grants to states and localities that communities use to fund a
           wide range of activities that build, buy and/or rehabilitate affordable housing for rent
           or homeownership or provide direct rental assistance to low-income people.
           Participating jurisdictions may use HOME funds for a variety of housing activities,
           including tenant-based rental assistance, housing rehabilitation, assistance to
           homebuyers, and new construction of housing. HOME funds are allocated using a
           formula designed to reflect relative housing need. 60% is allocated to units of local
           government and 40% to states. The ARRA specifies $2.25 billion to build and
           rehabilitate low-income housing under this program, including the use of green
           technologies during construction and renovation.
        b. Eligibility: HOME grants are awarded each year to participating jurisdictions based
           on an allocation formula. States are automatically eligible for HOME funds.
           However, local jurisdictions must meet a minimum allocation threshold in order to be
           a participating jurisdiction.
        c. Funding Allocation: $2.25 billion available until September 30, 2011.
                 i. Housing credit agencies in each state will distribute funds competitively
                    according to their qualified allocation plan.
                ii. Housing credit agencies within each state must spend 75% of funds within
                    one year of date of enactment of the ARRA and have spent all of the funds
                    within 2 years.
        d. Program Administration: HOME Investment Partnerships Program, Department of
           Housing and Urban Development (HUD)
           http://www.hud.gov/offices/cpd/affordablehousing/programs/home




                                            Page 8
  2.2.6   EPA Resources for Energy Efficiency in Affordable Housing:

          a. Energy Star for Affordable Housing:
             ENERGY STAR offers affordable housing stakeholders proven, turn-key solutions
             that can be deployed via housing policies and programs to cost-effectively increase
             energy efficiency for low-income households.
             http://www.energystar.gov/index.cfm?c=bldrs_lenders_raters.pt_affordable_housing
          b. ENERGY STAR Affordable Housing Success Stories:
             This Web site offers a series of affordable housing energy efficiency success stories
             from around the country.
             http://www.energystar.gov/index.cfm?c=bldrs_lenders_raters.pt_affordable_housing_
             success_stories
          c. ENERGY STAR Portfolio Manager:
             This tool helps track and assess energy and water consumption within individual
             buildings as well as across an entire building portfolio. Portfolio Manger helps you
             maximize your stimulus spending in three easy steps: 1) prioritize projects, 2) track
             progress, and 3) verify results.The tool was recently modified to allow multifamily
             buildings to be benchmarked.
             http://www.energystar.gov/index.cfm?c=evaluate_performance.bus_portfoliomanager
          d. ENERGY STAR Qualified Products:
             Find products in more than 50 categories that are eligible for the ENERGY STAR.
             They use less energy, save money, and help protect the environment.
             http://www.energystar.gov/index.cfm?fuseaction=find_a_product
          e. ENERGY STAR Procurement Guidance:
             This site offers training, resources, and case studies to assist procurement officials in
             making smart purchasing decisions.
             http://www.energystar.gov/index.cfm?c=bulk_purchasing.bus_purchasing
          f. ENERGY STAR Quantity Quotes:
             This Web site connects institutions, corporations, and other purchasing groups with
             suppliers who sell ENERGY STAR qualified products in bulk.
             http://www.quantityquotes.net/
          g. Local Government Clean Energy Strategies Guide Chapter on Energy Efficiency in
             Affordable Housing
             http://epa.gov/cleanenergy/documents/Section_6.2_AffHousing.pdf
          h. Reaching out to the Broader Community
             Local Governments can encourage residents who are not eligible for one of these
             funding programs to take steps making their homes more energy efficient with
             ENERGY STAR to reduce high energy bills, improve comfort and help to protect the
             environment.
                 i.   ENERGY STAR Home Improvement:
                      http://www.energystar.gov/index.cfm?c=home_improvement.hm_improveme
                      nt_index
                ii.   ENERGY STAR Home Energy Yardstick:
                      http://www.energystar.gov/index.cfm?fuseaction=HOME_ENERGY_YARDS
                      TICK.showGetStarted

2.3 Green Schools

  2.3.1   Higher Education Modernization, Renovation, and Repair (Green School)

          a. Description: The ARRA contains $53.6 billion to be administered by the Department
             of Education for a State Fiscal Stabilization Fund. The Secretary of Education will
             allocate this money to the states based on population and age considerations. The
             Secretary will also grant money to the governor of each state. The governor will use
             81.8% of the state’s allocation under section 14001 for the support of education
             program and services. The governor shall use the remaining 18.2% of the state’s


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             allocation for public safety and other government services, which may include
             assistance for elementary and secondary education and public institutions of higher
             learning, and for modernization, renovation, or repair of public school facilities and
             institutions of higher education facilities that are consistent with a recognized green
             building rating system.
          b. Eligibility: State governors are eligible to apply for State Fiscal Stabilization Funds.
          c. Funding Allocation: 18.2% of the state’s allocation of the State Fiscal Stabilization
             Fund.
                    i. Each state’s governor must return to the Secretary of the Department of
                       Education any funds received that the governor does not commit within two
                       years of receiving them and those funds will be reallocated to remaining
                       states.
          d. Program Administration: Department of Education (Ed)
                    i. http://www.ed.gov/policy/gen/leg/recovery/index.html
                   ii. http://www.ed.gov/programs/statestabilization/index.html

  2.3.2   EPA Resources for Green Schools

          a. ENERGY STAR for K-12 Schools.
             This Web site provides resources for school districts to use as they plan energy
             efficiency activities, including energy management guidelines, information on
             financing options, and tools and resources to measure and track energy use.
             http://www.energystar.gov/ schools
          b. ENERGY STAR for Higher Education
             Services include offerings for training, benchmarking/tracking, construction, financing,
             education, public outreach and more. http://www.energystar.gov/highered
          c. The ENERGY STAR Building Upgrade Manual
             This manual includes, in addition to a general five-step approach, a chapter on the
             unique challenges and opportunities in K-12 school buildings.
             http://www.energystar.gov/index.cfm?c = business.bus_upgrade_manual
          d. ENERGY STAR for Kids
             School districts can use energy efficiency projects in school buildings as learning
             opportunities for their students. This Web site provides information for kids about
             energy efficiency.
             http://www.energystar.gov/kids
          e. ENERGY STAR Success Stories
             This Web site offers a series of K-12 energy efficiency success stories from school
             districts around the country.
             http://www.energystar.gov/index.cfm?c = k12_schools.bus_schoolsk12
          f. Indoor Air Quality in Schools
             This Web site offers resources on integrating energy efficiency and indoor air quality
             goals in school buildings.
             http://www.energystar.gov/index.cfm?c =
             k12_schools.bus_schoolsk12_indoor_airquality

2.4 Transportation and Alternative Fuels

  2.4.1   Alternative Fuel Vehicles Pilot Grant Program (DOE Clean Cities Program)

          a. Description: The Department of Energy has allocated some of the stimulus money
             granted to them by the ARRA to establish grants under the Alternative Fueled
             Vehicle Pilot Grant Program. These grants will be used to acquire alternative fuel
             vehicles, fuel cell vehicles, hybrid vehicles, and to develop the refueling infrastructure
             necessary for the continued success of these transportation means without federal
             support. The grant program may provide up to 30 geographically dispersed project
             grants, between $5 million and $15 million. The grants are dispensed on a


                                              Page 10
           competitive basis. Grant recipients can include state governments, local
           governments, and metropolitan transportation authorities in partnership with an active
           designated Clean Cities Coalition.
        b. Eligibility: Prospective applications will be limited to heads of state or local
           governments or a metropolitan transportation authority and a designated Clean Cities
           Coalition.
        c. Funding Allocation: $300 million available for this funding opportunity in 2009.
        d. Program Administration: Clean Cities Program, Energy Efficiency and Renewable
           Energy, Department of Energy (DOE)
           http://www.afdc.energy.gov/cleancities/progs/solicitations.php

2.4.2   Diesel Emission Reduction Act Grants

        a. Description: The ARRA provides funds to achieve significant reductions in diesel
           emissions from the existing fleet of 11 million diesel engines (locomotives, vessels,
           freight, transit, school buses, construction equipment, etc.). Funding is in the form of
           grants. Seventy percent of the available funds will be distributed as competitive
           grants to eligible entities, which include regional and local governments. The
           remaining 30% will be allocated to States for State clean diesel grant programs.
        b. Eligibility: States, local, tribal, or port agencies, including school districts and MPOs,
           with jurisdiction over transportation or air quality; and in some cases non-profit
           organizations with transportation or air–related missions.
        c. Funding Allocation: $300 million
        d. Program Administration: Office of Transportation and Air Quality, Environmental
           Protection Agency (EPA)
           http://www.epa.gov/cleandiesel/grantfund.htm

2.4.3   Transit Capital Assistance

        a. Description: Discretionary grants to public transit agencies for capital investments
           that will assist in reducing the energy consumption or greenhouse gas emissions of
           their public transportation systems. Priority will be given to projects that result in the
           greatest total energy savings. This funding is part of $6.9 billion which the ARRA
           allocates to general transit assistance grants.
        b. Eligibility: Public transit authorities
        c. Funding Allocation: $100 million
        d. Program Administration: Federal Transit Administration, Department of
           Transportation (DOT)
            http://www.fta.dot.gov/index_9118.html

2.4.4   Supplementary Discretionary Grants for a National Surface Transportation System

        a. Description: These discretionary grants exist for local and state governments as
           well as transit authorities to make capital investments in surface transportation
           infrastructure. For example, the grants could fund New Starts and Small Starts
           programs, which provide a primary resource for supporting locally planned and
           implemented transit investments. The grants can also fund passenger and freight
           train rail transportation projects and highway and bridge projects.
        b. Eligibility: State and local governments, application process not made public yet.
        c. Funding Allocation: $1.5 billion available through September 30, 2011.
        d. Program Administration: Department of Transportation (DOT)
           http://www.dot.gov/recovery/

2.4.5   EPA Resources for Transportation and Alternative Fuel Projects

        a. EPA Office of Transportation and Air Quality (OTAQ)



                                            Page 11
                       i. OTAQ regulates air pollution from many types of mobile sources, including
                          cars. The OTAQ website contains information on pollutants, fuels, and
                          programs which are related to air pollution from mobile sources. Visit
                          http://www.epa.gov/otaq/ for more information.
                      ii. The State and Local Transportation Resources website contains many
                          resources for helping state and local governments determine emissions from
                          mobile sources, research legislation surrounding the issue, find sources of
                          funding for new projects and address air pollution at a local level.
                          http://www.epa.gov/otaq/stateresources/index.htm
                     iii. OTAQ’s “Transportation and Climate” page offers information on
                          transportation GHG emissions, regulations, tools and analysis, and related
                          links from other federal agencies and research institutions.
                          http://www.epa.gov/otaq/climate/index.htm
              b. Local Climate and Energy Program
                       i. This program assists local governments in their climate and clean energy
                          efforts by providing technical assistance, analytical tools and outreach
                          support.
                          http://www.epa.gov/cleanenergy/energy-programs/state-and-local/index.html
              c. National Clean Diesel Campaign
                       i. The National Clean Diesel Campaign promotes diesel emission reduction
                          strategies. http://www.epa.gov/cleandiesel/
                      ii. The Clean Diesel Toolkit provides an array of tools and resources for
                          designing, funding and evaluating programs that reduce diesel engine
                          emissions. http://www.epa.gov/otaq/diesel/slt/basicinfo.htm
                     iii. A special Recovery Act web site for the National Clean Diesel Campaign is
                          available. http://www.epa.gov/otaq/eparecovery/index.htm

    2.5 Green Job Training

      2.5.1   Training for Careers in Energy Efficiency and Renewable Energy

.
              a. Description: Funding includes a specific set aside for research, labor exchange, and
                 job training projects that prepare workers for careers in energy efficiency and
                 renewable energy, as described in the 2007 Green Jobs Amendment to the
                 Workforce Investment Act. The Green Jobs Act focuses on training workers for jobs
                 in a broad range of industries, including energy efficient vehicles, sustainability, and
                 energy efficient building.
                 These funds are part of the training and employment services funding designated for
                 the Department of Labor in the ARRA. Additional funding is available for programs
                 under the Workforce Investment Act and Trade Adjustment Assistance program
                 which could be used for clean energy related programs at the recipient’s discretion.
              b. Eligibility: The Department of Labor has not yet published its application process.
                 However, the Green Jobs Act of 2007 authorized appropriations of different types of
                 funding for states, non-profits, and partnerships.
              c. Funding Allocation: A total of $3.95 billion will be distributed by the Department of
                 Labor for workforce training. $500 million is set aside for fields outlined in the Green
                 Jobs Act through June 30, 2010.
              d. Program Administration: Department of Labor
                 http://www.dol.gov/recovery/

      2.5.2   EPA Resources for Green Job Training

              a. Clean Energy Workforce Development
                  i. EPA launched the State Climate and Energy Technical Forum to explore
                     analytical questions and resolve key issues surrounding state clean energy


                                                 Page 12
                         efforts. On February 24, 2009, EPA facilitated a call specific to clean energy
                         workforce development. Materials from that call are available on EPA’s website.
                         http://www.epa.gov/cleanenergy/energy-programs/state-and-local/state-
                         forum.html#twoa



3    TAX INCENTIVES AND BOND PROGRAMS
      Along with the funding opportunities provided to local and tribal governments in ARRA are tax
incentives that encompass several potential approaches to energy efficiency, such as credits for the
implementation and maintenance of renewable energy supplies for buildings or motor vehicles. Local and
tribal governments may be able to take advantage of these provisions directly, or share information with
their communities to encourage individuals or businesses to use them.
       Some of the credits modify or extend eligibility requirements to receive tax benefits in previously-
existing laws while other credits are entirely new. In one example of a modification to an existing law, the
existing $2,000 cap on the 30 percent tax credit for the installation of solar- and geothermal-powered
utilities has been lifted entirely, as has the previous small-scale wind power cap, which had been set at
$4,000. One of the entirely new tax credits is the Advanced Energy Investment Credit; this establishes a
30 percent tax credit for those who invest in “advanced energy property,” which is defined as property that
generates renewable energy, such as solar panels for buildings or advanced battery technology for hybrid
cars. Credits up to $2.3 billion total may be allocated for this effort.
      The list below contains all of the energy-related tax incentives that may be relevant to local
governments. More information on these incentives can be found at
http://www.ase.org/content/article/detail/5347 and
http://www.acore.org/files/images/email/acore_stimulus_overview.pdf.

     3.1 Existing Homes Tax Credit

     This credit extends, and increases the value of, the existing credit for the cost of purchase and
installation of qualified energy efficiency measures and renewable energy-generating property to 30
percent for 2009 and 2010. The cap for the credit has also been increased from $500 to $1500. Qualified
deductible actions include the purchase and installation of insulation, windows, and energy-efficient air
conditioners, boilers, and furnaces.

     3.2 New Homes Tax Credit

     The credits for home builders were extended through 2010. Home builders are eligible for a $2,000
tax credit for a new energy efficient home that achieves 50% energy savings for heating and cooling over
the 2004 International Energy Conservation Code (IECC) and supplements. At least 1/5 of the energy
savings must come from building envelope improvements. This credit also applies to contractors of
manufactured homes conforming to Federal Manufactured Home Construction and Safety Standards.

     There is also a $1,000 tax credit to the producer of a new manufactured home achieving 30% energy
savings for heating and cooling over the 2004 IECC and supplements (at least 1/3 of the savings must
come from building envelope improvements), or a manufactured home meeting the requirements
established by EPA under the ENERGY STAR program.




                                                     Page 13
     3.3 Investment Tax Credit for Installation of Solar, Geothermal, and Wind Power

     For residential properties, this credit removes the previous $2,000 cap on the 30 percent federal tax
credit for purchase and installation of solar thermal and geothermal property. For business, the previous
$4,000 cap for purchase and installation of small-scale wind property (defined as wind power with a
maximum generation capability no larger than 20 kW). For example, if it cost a homeowner $25,000 to
purchase and install solar cells for electricity generation, the existing legislation would have limited the
credit for installing this system to $2,000. Under ARRA, $7,500 of the installation cost would be offset by
a tax credit. If a business were to spend $100,000 installing small-scale wind property, the previous credit
of $4000 will no longer apply and the tax credit will instead be $30,000.

     3.4 Advanced Energy Investment Credit (AEIC)

     The AEIC is an entirely new 30 percent tax credit for the investment in “advanced energy property,”
including technology for the production of renewable energy, energy storage, energy conservation, and
carbon sequestration, among other technologies. This will allow for up to $2.3 billion in tax credits in the
United States, total. Qualified investments include “personal tangible property that is depreciable and
required for the production process. 1 ”

     3.5 Renewable Energy Production Tax Credit Extension

     The ARRA extends the Renewable Energy Production Tax Credit, so that initiation of this credit will
be available for facilities put in place through 2013. Facilities that generate power from wind, geothermal,
hydropower, landfill gas, waste-to-energy, and bio-energy are eligible for this credit, which provides a 1.9-
cent per kilowatt-hour (kWh) benefit for the first ten years of a renewable energy facility's operation. This
credit is an alternative to taking a tax credit to cover the cost of purchasing and installing the property that
generates the energy. This credit will be based, as stated above, on the amount of energy generated.

     3.6 Election of Renewable Energy Investment Credit in Lieu of Production Credit

       This portion of ARRA establishes a credit for organizations that invest in renewable energy sources.
While the Renewable Energy Production Tax Credit (see 3.5) is calculated based on electricity generated
from renewable sources, this credit is calculated based on the capital cost of the projects. Recipients may
choose either the production tax or the investment credit, but not both. The 30 percent investment credit
applies to property that generates energy from “wind, closed-loop biomass, open-loop biomass,
geothermal, landfill gas, trash, qualified hydropower, and marine and hydrokinetic renewable energy
facilities placed in service in 2009 or 2010. 2 ”

     3.7 Coordination with Renewable Energy Grants

     This portion of ARRA indicates that properties that utilize renewable energy grants are unable to also
claim a tax credit for the production of that renewable energy. The purpose of this addition is to ensure
that credits and grants aren’t provided for the same property.



     1
       Database of State Incentives for Renewables & Efficiency (DSIRE): Federal Incentives for Renewables and
     Efficiency
     http://www.dsireusa.org/library/includes/incentive2.cfm?Incentive_Code=US52F&State=federal&currentpageid=
     1&ee=1&re=1
     2
       “ Renewable Energy Law Alert: House Bill Proposes Increased Incentives for Renewable Energy Projects”
     http://www.stoel.com/showalert.aspx?Show=3486



                                                      Page 14
     3.8 Repeal of Subsidized Energy Financing Limitation on Investment Tax Credit

      Properties owned by businesses, government agencies, or individuals would be allowed to qualify for
the investment tax credit, even if industrial development bonds or other subsidies finance the energy, but
this does not apply to those who claim the production tax credit (see 3.6).

     3.9 Installment of Alternative Fuel Pump Credit

     This previously existing credit, which provided for the cost of purchase and installation of alternative
fuel pumps so as to accelerate development of alternative fuel distribution networks, is expanded from 30
percent to 50 percent for tax years 2009-2010, up to a maximum of $50,000.

     3.10 Plug-in Electric Drive Vehicle Credit

    The ARRA expands this previously existing credit for purchase of plug-in electric drive vehicles to a
base amount of $2,500 with an additional $417 credit for each kWh of capacity in excess of 5 kWh, up to
a maximum of $5,000 per vehicle. For example, if a qualified electric vehicle’s energy storage capacity is
8 kWh, the tax credit allowable for the cost of purchasing the vehicle is $2,500 plus $417/kWh (over 5
kWh) x 3 kWh = $3,751.

     3.11 Clean Renewable Energy Bonds

    Tax credit bonds used to fund capital expenditures incurred on one or more qualified renewable
energy facilities including wind, geothermal, hydropower, landfill gas, waste-to-energy, and bio-energy.
ARRA authorizes an additional $1.6 billion of new CREBs, to be allocated 1/3 to state, local, and tribal
governments, 1/3 to public power providers, and 1/3 to electric cooperatives.

     3.12 Energy Conservation Bonds

    Increases and expands the bond limitation on energy conservation bonds by $2.4 billion for loans
and grants for qualified conservation purposes including a wide range of capital expenditures (e.g.
reducing energy use in publicly-owned buildings, implementing green community programs, and
developing rural renewable energy resources) and public education campaigns.

     3.13 Qualified School Construction Bonds

      State and local governments may issue up to $22 billion in "qualified school construction bonds" ($11
billion in 2009 and $11 billion in 2010), a new type of tax credit bond for "the construction, rehabilitation,
or repair of a public school facility, or for the acquisition of land on which such a facility is to be
constructed". Tribal schools receive an additional $400 million of the bonds ($200 million in 2009 and
$200 million in 2010). Details about the qualified school construction bond program are not yet available.




                                                     Page 15
     3.14 Qualified Zone Academy Bonds

      Funding for the Qualified Zone Academy Bonds (QZAB) program for schools is increased by $2.8
billion ($1.4 billion in 2009 and 1.4 billion in 2010]. QZABs must be used for rehabilitating or repairing
public school facilities, investing in new equipment and technology, developing challenging course
materials, and training teachers. QZABs may not be used for new construction.

     3.15 EPA and Other Federal Resources

     The following websites provide more information about these tax credits and the programs targeted
by these credits:
         •   AgStar (this program encourages the profitable use of methane recovery technologies at
             CAFOs that manage manure as liquids of slurries):
             www.epa.gov/agstar
         •   Climate Leaders (this program works with companies to develop comprehensive climate
             change strategies):
             www.epa.gov/climateleaders
         •   Coalbed Methane Outreach Program (a voluntary program that promotes the profitable
             recovery and use of coal mine methane):
             www.eoa.gov/coalbed
         •   Combined Heat and Power Partnership (CHPP) (CHP can greatly increase a facility’s
             operational efficiency and decrease energy costs):
             www.epa.gov/chp
         •   Electronic Product Environmental Assessment Tool (EPEAT) (system to help organizations
             evaluate computers and monitors, in terms of energy efficiency):
             www.epeat.net
         •   Energy Star Home Improvement:
             http://www.energystar.gov/index.cfm?c=home_improvement.hm_improvement_index
         •   Federal Tax Credits for Energy Efficiency: www.energystar.gov/taxcredits.
         •   Green Communities: http://www.epa.gov/greenkit/index.htm.
         •   Green Power Partnership (GPP)(GPP promotes the use of renewable energy by providing
             technical assistance, networking, and public recognition to organizations that utilize green
             power):
             www.epa.gov/greenpower
         •   Landfill Methane Outreach Program (LMOP) (LMOP encourages the recovery of landfill gas
             for use as an alternative energy source):
             www.epa.gov/lmop
         •   Performance Track (This program recognizes and drives environmental excellence by
             encouraging facilities with strong environmental records to go above and beyond their legal
             requirements, setting an example for others):
             www.epa.gov/performancetrack
         •   Renewable Energy Production Incentive: http://apps1.eere.energy.gov/repi/




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